Correlation Between Airlie Australian and Betashares Asia

Can any of the company-specific risk be diversified away by investing in both Airlie Australian and Betashares Asia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Airlie Australian and Betashares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Airlie Australian Share and Betashares Asia Technology, you can compare the effects of market volatilities on Airlie Australian and Betashares Asia and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Airlie Australian with a short position of Betashares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airlie Australian and Betashares Asia.

Diversification Opportunities for Airlie Australian and Betashares Asia

0.44

Correlation Coefficient

Airlie Australian  Betashares Asia

Very weak diversification

The 3 months correlation between Airlie and Betashares is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Airlie Australian Share and Betashares Asia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betashares Asia Tech and Airlie Australian is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Airlie Australian Share are associated (or correlated) with Betashares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betashares Asia Tech has no effect on the direction of Airlie Australian i.e., Airlie Australian and Betashares Asia go up and down completely randomly.

Pair Corralation between Airlie Australian and Betashares Asia

Assuming the 90 days trading horizon Airlie Australian Share is expected to under-perform the Betashares Asia. But the etf apears to be less risky and, when comparing its historical volatility, Airlie Australian Share is 1.85 times less risky than Betashares Asia. The etf trades about -0.03 of its potential returns per unit of risk. The Betashares Asia Technology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  947.00  in Betashares Asia Technology on December 1, 2024 and sell it today you would earn a total of  165.00  from holding Betashares Asia Technology or generate 17.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Airlie Australian Share  vs.  Betashares Asia Technology

Airlie Australian Share

Risk-Adjusted Performance

Very Weak

Over the last 90 days Airlie Australian Share has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Airlie Australian is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Betashares Asia Tech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Betashares Asia Technology are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Betashares Asia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Airlie Australian and Betashares Asia

The main advantage of trading using opposite Airlie Australian and Betashares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airlie Australian position performs unexpectedly, Betashares Asia can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Betashares Asia will offset losses from the drop in Betashares Asia's long position.

The idea behind Airlie Australian Share and Betashares Asia Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.